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Sh3bn cooking gas for the poor hit by fraud

Cooking gas cylinders. PHOTO | FILE
A man walks past cooking gas cylinders displayed for sale in Ukunda, Kwale County. FILE PHOTO | NMG  

Fraudulent contractors supplied 67,251 faulty gas cylinders, scuttling a government plan to provide poor homes with cheaper cooking fuel, a report on the multi-billion shilling project has revealed.

More than a third of the liquefied petroleum gas (LPG) cylinders supplied to the National Oil Corporation of Kenya (Nock) were sub-standard, including having faulty valves that posed the danger of fire eruptions.

Under the Sh3 billion plan, dubbed the Mwananchi Gas Project, the households were to receive 6kg cooking gas cylinders and burners at a discounted price of Sh2,000.

The market price for the a 6kg gas cylinder with cooking accessories is about Sh5,000.

An internal report prepared by Nock, the State oil marketer, shows it rejected 67,251 cylinders supplied by four local firms out of a total of 353,000 that were supplied, citing poor quality.

The tender in the first phase of the gas plan was valued at over Sh700 million.

The cheaper cooking gas plan is aimed at entrenching use of the commodity among low-income households.

The subsidy plan is aimed at cutting reliance on kerosene and charcoal, which are not environment-friendly.

Under the plan, which has already been piloted in Machakos and Kajiado counties, the Ministry of Energy is expected to buy about one million new cylinders for distribution.

The Sh2 billion allocation for the year starting July this year increased the subsidy scheme to Sh3 billion after the Treasury offered the Petroleum ministry Sh1 billion in the current financial year.

The State oil marketer’s documents show local firm Allied East Africa Ltd supplied a total of 148,750 cylinders of which 47,534 were rejected for being defective.

A further 11,823 cylinders out of a total of 104,125 supplied by Surge Energy were rejected for being substandard, as were 7,894 out of 44,625 supplied by Accurate Power Systems.

All the 59,500 cylinders supplied by another firm, Metal Mate, were, however, approved.

Mary Jane Mwangi, the National Oil Corporation of Kenya (NOCK) chief executive.

Mary Jane Mwangi, the National Oil Corporation of Kenya (NOCK) chief executive. FILE PHOTO | NMG

The defective LPG cylinders have raised queries on whether the Ministry of Petroleum and Nock conducted due diligence when it contracted the suppliers.

Nock is yet to inspect 75,662 gas cylinders before making a decision on whether to release them into the market, according to the report.

The Business Daily has also learned that the State oil marketer, the implementing agency, plans to recruit a firm to undertake further inspections on 35,418 cylinders already distributed to poor homes under the programme to ascertain their quality.

But the Nock chief executive, Mary Jane Mwangi, yesterday dismissed safety fears around the cylinders piloted in Kajiado North Sub-County and Machakos County.

“That’s not the true position,” said Mrs Mwangi on the phone, seeking to distance the State oil marketer from the botched tender.

“Inspection and acceptance reports go to the owner of the tender, (which is) the ministry.”

Petroleum Principal Secretary Andrew Kamau did not respond to the Business Daily queries yesterday on the quality and safety fears surrounding the cylinders.

Sub-standard cylinders that leak easily pose risks of fires and explosions to users.

The Petroleum and Mining ministry, through Nock, was tasked by President Uhuru Kenyatta to roll out the “Mwananchi Gas Project” in mid-2016.

Nock later launched the “Project Mwananchi” campaign where it disclosed plans to make 4.3 million cooking gas cylinders available Kenyan households in three years.

Under the project, the 6kg complete cylinders (gas, burner and grill), trading under the brand name “Gas Yetu”, were to be distributed at the discounted price of Sh2,000 to households that would otherwise not afford them.

Besides the discounted price, Nock was also to develop a robust distribution model to enable Kenyans access LPG at the nearest shopping centre through licensed distributors and retailers.

The programme would enhance LPG penetration from approximately 10 per cent currently to 70 per cent within three years.

Gas has become the preferred energy source for households that can afford it in major towns, due to its convenience and because it is cleaner than other cooking fuels. To obtain the discounted cylinders eligible households were expected to present themselves with their national ID cards to area chiefs for registration.

Refills would be available at appointed Gas Yetu retailers within their locality at a cost of Sh840 per cylinder, Nock had said.

“It would reduce respiratory diseases and mortality rates associated with household air pollution as a result of sustained use of firewood and charcoal (and) uplift the quality of life for the majority of Kenyan citizens by making clean cooking fuel (LPG) readily available,” the State oil marketer says on its website.

It was also aimed at reducing deforestation as beneficiaries would move away from the use of biomass (charcoal and firewood).

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